The Glyn Rhonwy Pumped Storage Hydropower project, in Llanberis near Snowdonia, was granted a development consent order by energy secretary Greg Clark yesterday.
Two disused slate quarries, Glyn Rhonwy and Chwarel Fawr, will be converted into reservoirs to generate electricity via a turbine.
Quarry Battery, the company behind the scheme, said the 99 MW project would create 100 jobs during a three-year construction phase and 30 long-term jobs, according to reports.
The total cost to develop, design and build the development could hit £160m.
Quarry Battery managing director Dave Holmes said: “We are really pleased that this excellent scheme has been given consent today by the government.
“Electricity storage is the natural partner to renewable generation and the missing piece of the UK low-carbon strategy.”
Global infrastructure services firm Aecom has worked on the project, including providing engineering design and environmental consultancy.
Aecom associate director Catherine Anderson said: “Today’s DCO marks a significant milestone for this important project that will help boost the UK’s ability to respond to changing patterns of electricity generation and demand.”
Building work on the development is expected to start in the next 12 months.
The scheme was first granted planning permission by Gwynedd Council in February 2014.